Assam to enact law to protect people from micro loan harassment

Guwahati, Dec 28 : The Assam government on Monday moved a bill in Assembly to protect people belonging to economically vulnerable groups from undue hardship of interest rates and coercive means of recovery by micro finance institutions or money lending agencies.
The Assam Micro Finance Institutions (Regulation of Money Lending) bill, 2020, tabled in the opening day of the 3-day winter session of the Assembly, stipulates that lenders shall ensure that a borrower does not have existing loans from not more than two lenders and the current cumulative loan outstanding shall not exceed Rs 1.25 lakhs.
The bill, tabled by Finance Minister Himanta Biswa Sarma, mandated that all MFIs operating in Assam will have to apply for registration, within 30 days from date of enforcement of this act.
According to the bill, all micro credit activities shall be reduced during floods, other periods of distress or natural calamities and shall be given a minimum period of three months of moratorium on interest payment and may be extended by multiples of the same.
“Not more than two MFIs shall lend to the same borrowers. No MFIs shall seek any security from a borrower by way of pawn, pledge or other security for the loan. The bill provided for standard loan agreement and a loan card must be provided to the borrower. The effective rate of interest charged shall be prominently displayed,” the bill said.
As per the bill, for those using coercive actions, the provisions of Code of Criminal Procedure 1973 shall apply to proceeding before a fast track court.